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As the digital development of enterprises globally begin to move from the digital transformation (DX) era to the digital business era, the government of China unveiled its plan for the country’s digital development. This further clarifies their goals for China’s overall digital development, sharing for the first time their framework of “2522”, complete with guarantees of implementation. The timely release of this plan, which also sets China’s development goals for 2025 and 2035, will help cope with the current economic downward pressure and safeguard the accelerated development of China’s digital economy. The Plan is expected to greatly promote industrial users’ DX and the development of digital businesses and provide huge business opportunities for ICT vendors.

Building the Road to Digital China

  • Implement new development concepts, accelerate the fostering of new development paradigms, and focus on promoting high-quality development.
  • Balance development and security, strengthen systems and worst-case scenario thinking, and enhance the overall layout of the plan.
  • Follow the strategic path of solidifying the foundation, empowering the whole system, strengthening capabilities, and optimizing the environment.
  • Improve the integrity, systematic approach, and collaboration in the construction of a digital China, and promote the deep integration of the digital economy in the real economy.
  • Drive the transformation of ways of production, living, and governance with digitalization to inject strong impetus into the drive of advancing the great rejuvenation of the Chinese nation on all fronts with Chinese modernization.

2025 and 2035 Development Goals

The Plan sets out to implement 13 key goals in two phases targeted to be completed by 2025 and 2035, respectively. These goals define the pattern and lay the foundation for the construction of Digital China, and are designed to be more reasonable and coordinated developments across all aspects to strongly support the building of a modern socialist country.

Layout

The construction of Digital China will be laid out according to the framework of “2522”, which provides a directional guide for the development of the economy and society, and makes a clearer plan for the future of China’s digital economy:

Guarantees of Implementation

Efforts must be made to strengthen the overall planning, coordination of progress, and execution of all tasks. Specific guarantee measures will focus on five aspects:

  • Strengthening organizational leadership
  • Improving institutional mechanisms
  • Ensuring investment
  • Strengthening talent support
  • Creating a good atmosphere.

Moreover, the Plan specifies that efforts must be made in building digital China as a reference for the evaluation of relevant Party and government leading officials, which guarantees the implementation of the Plan from the aspect of KPIs.  

The Plan’s Positive Impact on the China ICT Market

  1. The Plan further highlights the value of digital technologies and strengthens the ICT industry’s development confidence. For the first time, the Plan proposes the promotion of the in-depth integration of digital technology with economic, political, cultural, social, and ecological progress. The Plan will help China promote a stronger digital economy, develop an efficient and coordinated digital government, build a digital culture with confidence and prosperity, create a digital society featuring inclusiveness and convenience, and shape a green and intelligent digital ecological civilization.
  2. Faster than expected growth in digital infrastructure business opportunities, as well as big data and AI. In November 2022, the China National Development and Reform Commission issued a report on the development of China’s digital economy, which puts forward a plan to moderately deploy digital infrastructure construction in advance to lay a solid foundation for digital economic development. This Plan reaffirms the need to remove the barriers to balanced development of the digital infrastructure across the country and accelerate the construction of infrastructure such as 5G networks, gigabit optical networks, IPv6, mobile Internet of Things (IoT), BeiDou Navigation Satellite System, and national computing network to synergize east and west. The Plan also proposes to promote the big cycle of data resources, accelerate the aggregation and utilization of public data, unleash the potential value of commercial data, speed up the establishment of a system of property rights for data, carry out research on data asset pricing, and establish a mechanism for the participation of data elements in value distribution by contribution.
  3. Digital sovereignty continues to be refined and deepened, and the cybersecurity market continues to grow rapidly. Digital sovereignty and cybersecurity are becoming increasingly important as the losses caused by geopolitics and insecurity intensify. The Plan sets forth to strengthen cybersecurity and data security and improve the data governance ecosystem and systems. It clearly proposes to improve laws, regulations, and policy systems related to cybersecurity, effectively maintain cybersecurity, enhance data security assurance capabilities, establish a basic system for hierarchical and classified data protection, and perfect the system for network data monitoring and early warning and emergency response with the aim of building a trusted and controllable digital security barrier.
  4. The Plan promotes international cooperation and opening up to achieve win-win results and benefit the global deployment of Chinese ICT vendors. The Plan specifies to coordinate international cooperation in the digital field by establishing a system of international exchanges and cooperation with multilevel collaboration and support, and multi-entity participation; build a high-quality Digital Silk Road; and actively develop Silk Road ecommerce. China will expand international cooperation in the digital field, actively join digital cooperation platforms under the multilateral frameworks of the United Nations, the World Trade Organization, the G20, APEC, BRICS, and the SCO, and build new high-quality new platforms for open cooperation in the digital field.  

Learn more about the IDC China Digital Business Strategies research on the impact of government policies on digital business and the ICT market. Talk to IDC experts today.

Lianfeng Wu - Vice President - IDC

Analyst Profile
Mr. Wu Lianfeng, the Vice President and Chief Research Analyst of IDC China, has more than 25 years of experience working in the IT industry. Since joining IDC in 2000, Mr. Wu has extensive research and consulting experience in the areas of overall ICT market, vertical industry market, Internet and new media, smart connected devices, software and service outsourcing, digital transformation, digital economy, and emerging technology, among others. In recent years, Mr. Wu has been leading IDC China's digital transformation research and event. In 2017, he started to build the CXO circle excellence club, the vision of which is to help industry CXOs transform from good to excellent. Mr. Wu holds monthly offline activities and publishes daily articles that focus on digital transformation: business trends, technology trends, industry trends, organizations, and people role trends. Mr. Wu also worked with IDC global analysts to lead China's annual ICT direction forum and Top 10 Predictions (IDC FutureScapes) forum, providing industry forecasts of the latest development directions and business opportunities. At the same time, Mr. Wu works with a team of analysts to explore and discover new research topics and build thought leadership in the ICT market. Recent research areas he has delved in include Future of Work (FoW), Future Industry, Smart City, and DevOps, among others. Mr. Wu is also a guest speaker in all kinds of top ICT summit, CIO summit, and industry digital transformation summit. He gives nearly 50 speeches every year, which greatly promotes the application and development of digital technology in the industry. Prior to joining IDC, Mr. Wu worked with China Academe Launch-vehicle Technology (CALT), China Hewlett-Packard Co. Ltd., Jardine Pacific (JOS) Information Technology Co. Ltd., accumulating 9 years of working experience in the field of IT and telecommunications. Mr. Wu holds an MBA from the University of International Business and Economics in Beijing, a Master's degree in Engineering from China Academy of Launch Vehicle Technology, and a bachelor's degree in Engineering from the University of Electronic Science and Technology.

The IMF has warned that half of the European Union and a third of the world face recession in 2023. This means that economic headwinds such as energy costs and currency fluctuations are forcing organisations to reassess budget decisions.

In our recent Future Enterprise Resilience and Spending Survey (December 2022), IT leaders said they expect inflation to impact spending decisions. IT cost price increases stemming from inflation and currency changes is expected to have the greatest impact on IT spending plans in 2023.

C-suite concerns are related to IT and technology challenges. In our Worldwide C-Suite Tech Survey (August 2022), 60% of European C-suite concerns about the impact on their IT and digital spending was related to challenges coming into sharper focus as macroeconomic conditions worsen. This includes IT price increases stemming from inflation.

So how can tech vendors navigate these issues and thrive?

Planning Is the Foundation for Success

According to research by the Harvard Business Review, companies that not only survived recessions but thrived afterwards were those that were prepared and agile — those that didn’t just slash costs but invested strategically.

Strategy is essential to know where to plan resources, to determine which projects you are going to prioritise and which you are not, and to know how you are going to identify and target the opportunities that will give you the best return.

Download eBook: Essential Building Blocks for an Effective Growth Strategy

A good strategy should help you align with business conditions, so that you can be agile enough to deliver short-term savings without impacting long-term growth.

Informed Decisions

Data becomes more important in volatile and uncertain economic situations. Economic conditions can impact regions and industries differently. Knowing the factors that might impact the market(s) you are selling into is crucial.

Those who are buying tech is changing, with European tech spending moving from the IT department to the C-suite. In Europe, 47% of IT spending is now C-suite funded (source: IDC Worldwide IT Spending Guide: Line-of-Business Forecast, January 2023, European forecast).

Download eBook: Speaking the Language of the C-Suite: Selling Beyond the IT Department

This is an example of how data can give you insight into your customers and how they are buying. Knowing who is buying, where they are spending and what is impacting spending decisions will help you build an effective strategy.

Data-supported decisions are key to effective resource management both internally and externally.

This means you need to know who is buying in your market. Which markets or industries are more resilient? What are their drivers and challenges?

Adapt and Invest

Times of economic uncertainty can also be a time of possibility. Microsoft, Instagram and Airbnb, for example, were all formed during or just after a recession.

Technology is an area where businesses tend to continue or increase spend. 66% of European C-suites believe that IT budgets will increase, even during an economic downturn (source: IDC Worldwide C-Suite Tech Survey, August 2022).

According to our Digital Executive Sentiment Survey (October 2022), European organisations now expect more than 50% of their revenues to come from digital business models on average in the next three years.

Technology is often seen as a critical business differentiator to better deliver business outcomes, increase resilience and accelerate revenue growth. So while caution may continue while the economic outlook is uncertain, investments in projects that improve efficiencies are continuing. According to the Harvard Business Review, prioritising digital transformation and digital technology can help cut costs and improve efficiencies.

In an economic downturn it can be harder to achieve growth, as you have to do more with less. It can also be harder to get customers to spend, so you must ensure that you are targeting the opportunities with the best chance of success.

But there are opportunities. So what you do and where you allocate resources becomes increasingly important.

You need results. To be proactive rather reactive, but still agile enough to pivot to changing market conditions. An effective strategy is essential to that.

Visit our website for more information on how we can help you build for growth.

We’re all familiar with two main types of cars for sale: Internal Combustion Engine (ICE)/regular cars or Electric Vehicle (EV)/electric cars. With the first one, you’ll have your regular maintenance scheme, and the car remains virtually the same as at the time of purchase. This is revolutionarily different than most electric cars. New “Over-the-Air” (OTA) updates for the car bring new features and improvements every month. This means that the car is getting a little bit better over time without going to the mechanic. That would also be nice for an IT environment, right?  

To accomplish this, companies are implementing Evergreen IT. But what exactly is Evergreen IT, what are the risks and how can you start applying it within your organization? This blog introduces you to the world of Evergreen IT.   

Evergreen IT 

Although the term ‘Evergreen IT’ has been around for quite some time, it is still relevant. Many companies are still catching up with technology and ways of working which are more iterative. The balance is shifting more and more towards shorter times to market for introducing new functionality and updating solutions that make use of Software as a Service (SaaS) and (public) cloud infrastructure. This requires a different approach and processes that are more aligned to these objectives.  

The Evergreen IT approach takes new ways of working from managing (public) cloud infrastructure and SaaS solutions and applies these to managing IT in general. Instead of meticulously planning large, lengthy upgrade projects, smaller updates are applied at faster frequency. The smaller updates mostly contain smaller changes in functionality and technology, which reduce the effort required to check on compatibility issues in solutions. Evergreen IT also aligns to the agile way of working which has become prevalent in many IT departments and IT vendor delivery teams. And, Evergreen IT supports the next step and move to DevOps.  

Challenges 

Introducing the Evergreen IT method requires a new kind of flexibility and managing the expectations from the end-user perspective. In more traditional IT organizations, end users face larger changes in functionality and need more time to adopt the updated solution. To manage this change and adoption, management is focused on preparing and managing the expectations of end users. Also, during and after implementing the change, IT organizations should make sure the right amount of support is available for after care. This process sounds straightforward and relatively simple, until it concerns changes in which various parties/suppliers are needed. In that case, the IT organization and supplier(s) should prepare and plan extensively regarding communication and minimize possible impact on the IT environment. End users should be informed along the changes journey to make them understand the impact on their working environment and that they might encounter some issues. The same applies to the other suppliers in the ecosystem, who need to be informed (or even taken along) as well about the upcoming changes. Managing the entire change cycle is very time consuming and proven difficult. 

The Evergreen IT approach is 180 degrees different compared to the traditional way of managing change – that is a good thing! In an evergreened IT environment, end users are facing smaller but more frequent changes. For example, daily routines of today’s end user include updates from apps, telephones and even cars. So, end users are already familiar with this process to a certain extent and have experience in a rapidly changing environment with little impact. This is a huge advantage for the IT department and helps them with faster change and the sequential introduction of new functionality and technology. By applying and deploying minor changes, end users will experience a constantly improving and easy to use IT environment and won’t be bothered with large incremental upgrades. With the introduction of Evergreen IT, also the need for communication declines because end users can continue to work as if nothing is changed.  

From the perspective of the IT department, there are multiple challenges and requirements in changing the way of working into a more agile one, which helps achieve evergreening objectives. Some examples of changes that are needed include increasing the frequency and attentiveness of monitoring trends and updates in technology and solutions. Also enhancing the flexibility of service processes like: Change Management, Release and Deployment Management, Service Validation, and Testing and Security Management, is needed. Besides the process and monitoring function of the IT organization, also the testing capabilities need to improve. Testing new versions need to happen more frequently and on an ongoing basis to become more flexible and to adopt and push new solutions quickly.  

All these changes to process require a higher level of automation, to make sure tests are performed correctly and consistent and deployment is executed seamlessly in the production environment. This aligns and supports the DevOps way of working, with the purpose of integrating development of new functionality and IT Operations, to deploy improvements and functionality faster.  

Besides improving the current IT environment and IT (Service) Management Processes, the introduction or redefinition of IT Outsourcing can play a huge role in adopting the Evergreen IT methodology and help tackle some of the challenges mentioned above.  

Experience 

Based on our experience, to be able to evergreen IT, companies need to adhere more closely to the standard ‘out of the box’ or ‘off the shelf’ functionality of (software) solutions. In this way updating becomes easier, because a large part of the testing is done by the supplier of the solution. IT organizations on the other hand, mainly need to focus on the integration of the solution within the IT environment. Additional customizations and add-ons build on top of standard solutions require more effort, which may add time to releasing and deploying new functionality. The disadvantage of mainly implementing standard functionality is that solutions are less tuned to the existing business processes and the business will need to align their processes to the solutions. 

Also, to be able to react proactively on changes to solutions, the IT department will need to monitor supplier and market developments and trends more closely and make sure that governance and (Service Management) process include this. 

Lastly, before changing a system or solution in a business process, a business case should always be part of the assessment and decision making. This way, a concise decision can be triangulating the short- and long-term objectives along with the associated financial implications.  In our experience, a business case is often lacking or not given the right amount of attention. This results in a discussion based on opinions and conversations without having solid facts! 

 Actions & tips on how to start with Evergreen IT  

  • Use the ‘at home’ end-user experience as a foundation for designing processes for upgrading solutions and implementing new functionality. At home, end-users are accustomed to an evergreen environment where updates and new functionality are delivered quickly in small iterations, and this expectation is increasingly being transferred to their working environment. 
  • Implement a multi-channel communication strategy to notify end-users, using succinct messaging along providing links to specific locations to provide more detailed information. This will allow end-users to easily access additional information about the changes and new functionality, if they desire (such as via email, SharePoint, and the company intranet/website). 
  • (re)Consider IT Outsourcing opportunities to help in introducing or further maturing the Evergreen IT way of working into the IT environment.  
  • Align to standards of the provided solution by limiting the level of customization. 
  • With regards to testing: Automate, Automate, Automate! This supports the required speed and agility in deploying new software.  
  • Validate the maturity of the supplier processes regarding their SaaS or (public) cloud solutions. Like IT departments, vendors are also in various stages of implementing Agile, DevOps, Evergreen processes resulting in risks. Verify the level of maturity carefully to make sure that the IT department and the supplier processes are aligned.  

Maximize IT investments for the business through effective sourcing and management of partners with IDC Metri’s Sourcing services.

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IDC’s Future Consumer research leverages eight primary categories to help paint a picture of a consumer’s whole life and the role that technology plays in it. The eight categories of the Future Consumer Framework include Entertainment, The Home, Travel and Dining, Personal Mobility, Money, Shopping, Lifelong Learning, and Wellbeing. The goal is to go deep and wide to create a holistic view of the Future Consumer; we expect the framework to evolve based on client feedback and market shifts.

Our research includes survey data from seven countries as part of our Consumer Pulse research, internet penetration, online activities, online spending, and other forecasts as part of our 51-country Consumer Market Model (CMM), and thought leadership as part of our Future Consumer Agenda.

These consumer-centric insights will benefit not just companies focused on the consumer but also enterprise companies whose offerings must adapt to fit the demands of commercial entities whose workforce requirements are increasingly influenced by what consumers want. We believe that, increasingly, the consumer is the tail that wags the enterprise dog.

As we’ve built out this research over the past year, one thing has become clear: The data and insights we have in this research stream can help a much broader range of companies than typical technology-specific market research. To that end, we thought it might be helpful to pull an illustrative data point from each of the eight categories and articulate the broad swath of users inside a company that can use this type of data to build their business.

Entertainment

Impact/Data Point: The Future Consumer is more engaged with user-generated content and social media than with traditional linear TV or streaming. This will profoundly impact how future content is created, distributed, and consumed, and the resulting changes and influences carry huge ramifications for technology companies. Moreover, the CMM shows that spending on independent content subscriptions is set to grow at a 12% worldwide five-year Compound Annual Growth Rate (CAGR).

Who can use this type of data? Device OEMs, component vendors, strategy teams, technology marketers, content platforms, content delivery, and infrastructure vendors.

The Home

Impact/Data Point: More than 50% of Gen Z say working from home is better than working in the office, and readiness to work from home is driven by income over the type of work. As companies and employees continue to navigate the challenges associated with hybrid work, consumer attitudes will have an outsize impact on the hardware, software, and services that evolve to serve the home as the center of everything. The CMM shows that smart home-related services are set to grow at a 16% worldwide five-year CAGR.

Who can use it: Peripheral OEMs, smart office vendors, platform vendors, collaboration software developers, home services vendors, and security and privacy-focused software developers.

Travel and Dining

Impact/Data Point: The attitudes and behaviors of Gen Z and Millennials increasingly point to a very different lifestyle from previous generations regarding meals and dining. These two cohorts have a much more positive view of the quality of delivered food and the value of delivery services.

Who can use it: Hospitality, travel, transportation, and tourism executives, technology vendors serving the industry, and online travel service providers.

Personal Mobility

Impact/Data Point: Mobility is multi-mode for most, and 83% of Gen Z use at least two modes of mobility for at least 10% of their mobility time.  The largest share of all consumers (45%) uses three mobility modes monthly. The U.S. is the main exception to this pattern, with half of consumers using just one mobility mode. The CMM shows that micro-mobility services are set to grow at a 26% worldwide five-year CAGR.

Who can use it: Automotive executives, micro-mobility startups, technology strategy executives, OS and platform owners, government planners, and map services.

Money

Impact/Data Point: One in six (16%) of consumers report that their primary bank account is an online-only one. Gen Z (22%) and Younger Millennials (20%) stand out for their higher adoption. The latter are also much more likely to use the many different sources of alternative digital payments (peer-to-peer, digital wallets, etc.) over cash. The CMM shows that digital finance services are set to grow at an 11% worldwide five-year CAGR.

Who can use it: Banking and finance companies, fintech vendors, OS vendors, platform owners, device vendors, and security and privacy technology providers.

Shopping

Impact/Data Point: During the pandemic, online transactions became the majority for the first time.  Very few consumers buy “only online” or “only in-person.” Among Gen Z, 67% lean toward an online-first mentality, while younger millennials are at 75%. The CMM shows that online grocery services are set to grow at an 8% worldwide five-year CAGR.

Who can use it: Online and traditional retailers, direct-to-consumer vendors, device and accessory OEMs, and technology vendors that service retail clients.

Lifelong Learning

Impact/Data Point: Our research shows that 58% of consumers used online learning last year, and penetration is over 70% among Gen Z and Millennials but just 36% among Boomers and older. Those with a continuous learning mindset embrace it. The CMM shows that broad online services are set to grow at a 15% worldwide five-year CAGR.

Who can use it: Online learning platforms, app stores, OS providers, device vendors, content creation and delivery platforms, and strategy and marketing teams.

Wellbeing

Impact/Data Point: More people are exercising and doing it more frequently than before. Home’s share of workout time is at 44%, up from 36% pre-COVID but down from the 56% COVID peak. Interestingly, this is an area where Gen Z/Younger Millennials underperform the average. The CMM shows that online fitness services will enjoy a 19% worldwide five-year CAGR.

Who can use it: Connected health service providers, disease management firms, OS providers, wearable OEMs, and online health and fitness providers.

Conclusion

The data points above represent just the tip of the iceberg in terms of what IDC has to offer when it comes to consumer insights. Our team is ready to help you navigate an increasingly complex consumer environment with rock-solid survey data, strong forecasts built on well-reasoned assumptions, and thought leadership based on years of experience covering these markets. If any or all these topics interest you, we encourage you to reach out and start a discussion with our team.

If you’re attending West Coast Directions, be sure to register for Tom Mainelli’s Future Consumer breakfast presentation; if you won’t be there, reach out for a copy of the deck.

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Tom Mainelli - Group Vice President - IDC

Analyst Profile
Tom Mainelli heads the Device & Consumer Research Group, overseeing a wide array of hardware and technology categories that cater to both home and enterprise markets. His team's research spans PCs, tablets, smartphones, wearables, smart home devices, thin clients, displays, and virtual/augmented reality headsets. He also co-manages IDC's supply-side research team, which monitors display and ODM production across various categories. IDC's consumer research, anchored by the Consumer Market Model, employs regular surveys and proprietary models to forecast numerous consumer-focused activities and spending across hardware, software, and services. As Group Vice President, Tom collaborates closely with company representatives, industry contacts, and other IDC analysts to provide comprehensive insights and analysis on a diverse range of commercial and consumer topics. A frequent speaker at public events, he travels extensively, enjoying every opportunity to engage with colleagues and clients worldwide.

Not Going Back to the Office Full Time

If you bring together a group of senior managers and ask them what the most pressing concern is in their workplace strategy, the most likely answer will be, “How can we get our workforce back into the office?” Nostalgia about the “good old days” reassures them that work is better done in the office. A buzzing office at full capacity is often taken as a sign of high performance.

Our data shows that 68% of European employers are determined to have employees back full time in the office (IDC FoW Survey, 2022). Meanwhile, workers are demanding greater flexibility and a choice of where and how to work.

Some employees want to be in the office, while many want to “balance their lives” and family obligations. Our data shows that compared with hybrid staff, employees working onsite five days a week are 10% less likely to recommend their employer, meaning they are less loyal and more likely to switch jobs.

About 73% of office workers in Future Forum’s future-of-work study say they are open to new jobs if they are dissatisfied with the level of flexibility they are offered.

In the wake of a recession in Europe, however, many businesses are reluctant to invest in the technologies needed to transform their organisation into a digital-first workplace for the long term.

Our survey data from December 2022 shows that concerns around geopolitical tensions and labour shortages remain high in Europe, with inflation having the biggest impact on spending plans for 2023. 70% of organisations are planning to significantly reduce their IT spend in 2023 (IDC FERS Survey, Wave 11, 2022).

Many managers need to seriously consider whether a return to a traditional work policy will enable their business to survive in today’s world. A typical organisation has two generations of digital natives in their workforce (Millennials and Gen Z). Employees are key stakeholders in the evolution of their workplace, and their interests and preferences must be considered. Organisational culture needs to evolve and keep pace with social changes. The alternative, in form of a non-negotiable “everyone return to the office” strategy, would cause more harm than good in terms of business outcomes such as talent attrition, quiet quitters and lower productivity.

The Digital HQ and Why It’s a Must-Have

So, what is the way forward? A digital HQ that is accessible to all — those in the office and those working away from the office — can be the foundation for a more flexible work environment that drives performance, loyalty and other positive business outcomes.

Platform vendor Slack defines the digital HQ as “a single, virtual space to connect people, tools, customers and partners for faster and more flexible work”. Contrary to most assumptions, a digital HQ does not imply that people never meet in person.

Yes, the workplace is digital by default, but people will still get together in their office. However, they do so for team building and collaboration, social connection and networking, or training.

The understanding is that going to the office to replicate an at-home work pattern that focuses on productivity would be a waste of time. As a result, the office — or “physical headquarters” — is being reimagined less as a place of routine and obligation and more of a centre for driving company culture and values.

These new offices emphasise free-form flexibility, offering hot desks, huddle rooms and smart meeting rooms. However, too few companies have given thought to the workings and architecture of digital headquarters. And given that so many workflows and team collaboration efforts now happen in the digital space, that seems like a serious lack of imagination and an invitation to failure.

To ride the wave in a challenging labour market, companies must prioritise attracting talent and keeping existing employees motivated. By enabling employees to connect and collaborate from anywhere, a digital HQ helps companies to provide the flexibility that today’s workforce demands.

All workers can feel included and productive in a digital HQ, no matter where they live or what their daily schedules might look like. Flexible work practices are also essential to building inclusive workplaces, which is top of mind for many employers as diversity, equity and inclusion have become a priority in recent years.

A digital HQ can break down silos, unite teams in an asynchronous work model and boost security. Employee and customer experience will benefit from that increased agility and create a stronger culture as a result. The fact that 56% of European companies feel they are not ready to meet current and future work transformation requirements should be a wake-up call for those trying to survive the coming storms of disruption.

Meike Escherich - Associate Research Director, European Future of Work - IDC

Analyst Profile
Meike Escherich is an associate research director with IDC's European Future of Work practice, based in the UK. In this role, she provides coverage of key technology trends across the Future of Work, specializing in how to enable and foster teamwork in a flexible work environment. Her research looks at how technologies influence workers' skills and behaviors, organizational culture, worker experience and how the workspace itself is enabling the future enterprise.

The Asia Pacific region does not yet have its version of the European Union’s Corporate Sustainability Reporting Directive (CSRD), but IDC’s research on Trends in Sustainability Regulation in Asia Pacific is seeing an interesting pattern in changes in national policies and regulations, which will have a similar effect as CSRD.  The emerging trend? Stricter regulations and more supportive policies to organizations’ Environmental, Social, Governance (ESG) commitments and progress reporting.

However, true to the regional nature of Asia, the driving pace of policy affecting sustainability is not the same across all countries. This has made some Asian countries, by intent or purpose, to become Pacesetters, Emerging Leaders, or Watchers for sustainability. These three distinct segments can be viewed as a country’s sustainability maturity level based on the driver of rules:

  • Pacesetters are economies that have an enabling regulatory environment for sustainability/ESG adoption
  • Emerging Leaders are economies where regulations relating to sustainability/ESG is getting more stringent in recent years
  • Watchers are economies with more companies still planning their sustainability initiatives and are in their early stages of the sustainability journey

This public sector push creates increased demand for technological interventions to enable compliance, making Pacesetters and Emerging Leaders hotspots for growth opportunities for sustainability-related technology products and services. Meanwhile, Watchers are closely observing sustainability Pacesetters and Emerging leaders for best practices to emulate and follow in the future.

According to the IDC Global Sustainable Strategies and Technologies Buyer Value Survey, 2022, knowledge of the regulatory environment is among the top three important criterion for evaluation of tech providers as it relates to organization’s sustainability initiatives. This means that changes in policies and regulations in sustainability will inevitably impact not just the execution of business strategies but tech buyer’s purchasing decisions.

The top four implications of these shifts in public sector sustainability standards, and the spotlight on sustainability/ESG to the tech industry in Asia Pacific are:

Greater demand for ESG reporting technology solutions and services

Akin to submissions of annual financial reports, sustainability/ESG reports will become a regular and normal part of business operations in Asia Pacific.

The sincerity of ESG efforts by businesses in Asia is measured against the quality of the organization’s publicly available information contained in sustainability/ESG reports. Similar to financial reports where targets are specific and quantifiable, organizations will need to be more specific and set KPIs against their initiatives. New regulations are already moving toward specific disclosure of information, standard metrics, and third-party audits.

Gone are the days where companies could brand themselves as “sustainable” and then forget to support that claim with actual and verifiable proof. Recent shifts in public policies and regulations in Asia mean organizations, regardless of size of headcount or revenue, must establish commitments towards environmental and social development goals, provide baseline versus target metrics alongside public declarations, align with national set standards on emissions goals, set deadlines for ESG initiatives, and report on progress made annually.

Increased sustainability/ESG tech spending

Organizations will need to dedicate resources to ESG-related endeavors. Translating sustainability initiatives into meaningful and impactful action will require time and investment. Sustainability/ESG reports for instance will require proper planning, strategy, and execution like annual reports and financial statements preparations. This means activities such as: sustainability/ESG data sources identification, data collection and validation, information gaps resolution, and analysis and reporting will need to be integrated into business operations. The workflow requirement would also need allocated resources for leadership and personnel training on sustainability, linking plans to respective business units’ strategies and individual KPIs, and investments in ESG-technologies to manage all information requirements and additional workload.  

Sustainability/ESG as an increasingly important decision-factor in procurement and partnerships

Greater incentives to comply with public sector sustainability standards will inevitably lead to the adoption of green procurement and greater demand for green suppliers. Green suppliers are product vendors and service providers that also comply with sustainability and ESG standards. Sustainability goals have supply chain emissions tracking requirements that encourage organizations to shift to more environmentally friendly providers of raw materials and services or suffer the consequence of delayed or missed ESG targets.

Organizations can recognize green suppliers by their characteristics as below:

  • Tracks their own and their supply-chain’s carbon footprint/emissions
  • Sets specific dates for their sustainability initiatives and goals
  • Ties their sustainability/energy transition roadmap goals to KPIs
  • Reports on own sustainability/ESG programs
  • Practices the 3Rs – Reduce, Reuse, Recycle, in their own procurement of sustainable raw materials and packaging
  • Appoints a Chief Sustainability Officer
  • Promotes diversity, equity, and inclusion policies and programs
    • Supports through a governance structure, environmental and social endeavors, as well as data privacy and security
  • Has green certifications, accreditations, awards and recognition

Higher demand for Sustainability Talents/Services

Operational requirements needed to provide regular sustainability/ESG reports include appointing sustainability personnel to handle monitoring and supervision of the performance of ESG initiatives, progress tracking, audit and validation. Centralized decision-making would become a necessity as requirements on ESG increase and sustainability cuts across more business units and aspects of a company’s operations.

With a narrow talent market for leaders and sustainability-savvy personnel, the greater demand ushered by stricter and stringent reporting guidelines means that organizations will have to look for technology interventions and invest in upskilling of existing personnel to take up wider and deeper roles related to sustainability. As an example, accounting officers could be upskilled to know about ESG reporting frameworks, climate finance, carbon credits.

If you have any questions on how solutions providers like yourself can help your customers to adapt and benefit from these regulatory changes, we are here to help. Contact Us today and learn more about IDC research and services on Sustainability and how it can help you.

Melvie Espejo - Research Director - IDC

Analyst Profile
Melvie Espejo is a research director for IDC Sustainable Strategies and Technologies. She leads the sustainability research practice in Asia/Pacific, tackling sustainability/environmental, social, and governance (ESG) strategic research themes with a 360-degree lens. Melvie's across-industry, across-technology research captures topics, such as climate change technologies, ESG adoption and execution, sustainable transformation in organizations, circularity and the circular economy, green procurement, and sustainability/ESG regulations and its impact on technology investments, strategies, and the competitive landscape.

The Future of Work is going through a tumultuous time. In a response to tough market conditions, business leaders across industries, including high profile CEOs, are mandating a return to the office. The reason is no more than a desire among managers to boost employee performance by having tighter control over their reports.

Moreover, recent mass layoffs, which are essentially no more than a sugar rush for shareholders, can also be interpreted as a shift in power from employees back to employers. The latter are now in charge, dictating how work gets done for the sake of financial performance.

Will this last? Can we assume that the past few years of progress in the Future of Work have been erased from history?

Are You Ready for the “Era of Disruption”

Returning to a pre-pandemic workplace is not viable. A company with top-down decision making will find it difficult to adapt to a fast-changing environment.

Employees will not give the best of themselves if their voice is not heard, or if they feel disrespected or undervalued. Many will retire early, quiet quitting or even joining the large contingent of gig workers, simply because they feel “they don’t belong”.

The pandemic taught us something profound that goes beyond “where” work happens. It is the realisation that work is a projection of ourselves, our life goals and aspirations, and a means of fulfilment.

Meaningful Work

Brad Bird, the movie director, once said, “Money is just fuel for the rocket. What I really want to do is go somewhere.” This sentence, which reflects the mindset of many people at work today, can be summarised in one single word: Purpose.

With Millennials and Gen Z making up roughly half of the current workforce, and soon becoming our future leaders and CEOs, it is reasonable to expect “corporate purpose” to change business as we know it today. Younger generations want to work for companies with impact, beyond shareholder value.

Purpose is the secret sauce for high performance

Therefore, it’s not “where” work happens but “why” work happens — i.e., the purpose of work that unlocks employee energy. In an era of disruption, when work has direction and is transformed into purpose it is powerful and energising.

Let’s think about a sailing racing yacht, and the teamwork involved to pursue a common goal, a North Star. In a racing yacht, the following applies:

  • The interest of the team is always above individual interest
  • There is just “one collective head” — they must think and act together
  • Every crew member has a critical role to play for the victory, from the leading role of a helmsman to the agile role of trimmers, tuning the sails to ensure maximum thrust.

 

How does the above apply to your firm? Are your people “energised” to collectively pursue your North Star? Do they feel their roles and responsibilities make an impact?

This is the secret sauce of high-performance organisations: by nurturing their core, business leaders can drive employee performance and team cohesion.

Sustainable companies do business and make profit by placing the welfare of their people, society and the environment as their core purpose. As such, unfair pay, work inequalities, “command and control” management styles and the social disconnect affecting many organisations today is foreign to them.

Companies with a sustainable purpose enjoy a more mature social contract between employer and employees. Thus, the choice of hybrid or full time in the office is actually irrelevant. What matters is that decisions are not top down but in partnership with employees.

Technology Is the Enabler

In a digital world, pursuing the North Star is far more effective (and enjoyable) when employees are given the right technology. Here are some suggestions:

  • Devices that are sustainable by design and appropriate for different workstyles
  • Digital Workspace solutions for productivity, inclusive collaboration and connection to purpose.
  • Workflow automation to free up employee time for more human work
  • Online training platforms to continuously elevate employee skills throughout their careers
  • Intelligent IT support for employee experience and productivity
  • Identity management for digital trust
  • Zero Trust security solutions for a perimeter-less workplace

In summary, placing purpose at the core of your business is most effective for employee performance and social cohesion. Numerous third-party studies show that purpose-led organisations outperform their peers.

If you would like to learn more about this and how technology enables a purpose-led organisation, join us at our IDC Future of Work Conference.

Customer listening. Customer engagement. Both well-established and understood aspects of the customer experience arsenal that many would argue they have already covered within their CX strategies. But have they?

The challenge for many organisations is that they believe they have ticked all the boxes on customer listening and engagement, when in fact all they have done is put in place a few CX tools that are each doing a good job in one part of the CX value chain or another but are operating in isolation of each other.

These organisations fail to realise the business value that is unlocked when these components work together in a single interconnected system. Once understood and implemented as a system of interconnected technologies, a fully functional customer listening and engagement system lets organisations make full use of customer signals to actively drive contextualised customer experiences.

So, what are the moving parts of a fully connected and functioning customer listening and engagement system?

  • Signal gathering: the exhaustive capturing of customer signals across all channels
  • Data consolidation: once signal gathering is in place, consolidate all customer data into a customer data platform
  • Real-time analysis: deploy analysis on your consolidated data in real time to unlock behavioural and intent insights
  • Decisioning and engagement: once gathered, consolidated and analysed, a decisioning system is needed to identify next best actions and drive contextualised and orchestrated experiences

These components will no doubt sound familiar, because many enterprises have already installed one or more of them, or plan to. In a recent IDC survey of European enterprise CX technology decision makers, we found that for each of the four components of customer listening and engagement, 80% of enterprises have already implemented the technology or plan to do so in the next 12 months.

So there is a tremendous amount of buy-in for these individual components. But the challenge is that too many organisations are treating them as individual tools, with each one brought in to address a specific business need at a point in time.

To maximise the benefits of a full customer listening and engagement system, all four components need to be in place and working together. But in our survey, we found that only 8% of enterprises have all four of these critical components installed, meaning most organisations are a long way off systematically leveraging customer signals to create differentiated contextualised experiences.

Customer Signal Gathering

What we mean by customer signals are any indication of what a customer is doing or intends to do with a brand. A fully optimised customer signal gathering system is one that takes in signals from across the whole estate of channels that customers use, truly reflecting the omni-channel customer journey. This includes long-established voice of customer systems that many organisations already have in place, based on survey-powered feedback-gathering mechanisms.

Customer signals also include not just conversations customers have with a brand, but also those conversations they are having about a brand. Many organisations are also deploying social listening and analysis tools to capture this. There are also the insights that can be harnessed from organisations’ customer engagement systems themselves.

All the data generated across the value chain — sales, marketing, onboarding, support and service — can shed light on customer behaviour and intent. All of this represents a myriad of customer signal sources. The question is: are you capturing all of them and are you doing it systematically? An optimised customer signal gathering strategy should ingest signals from all these sources.

Data Consolidation

Having exhaustively captured customer signals from all sources, organisations then need to house all this data in a single destination — a customer data platform (CDP) — to create a single version of customer truth. Data silos are one of the major barriers preventing organisations from getting a unified 360-degree customer view.

For organisations that want to leverage all the customer signals gathered from these sources, the CDP is a critical part of the customer listening and engagement system. More organisations are starting to recognise this. In IDC’s latest Future of CX Predictions, we predict that by 2024, 50% of the G2000 will adopt CDPs such as enterprisewide central nervous systems.

Real-Time Analysis

With all of this customer data now housed in a single destination, the key to maximising the insight extracted from it is to employ an analysis system continuously and in real time. Done right, this lets organisations respond to signals — both positive and negative — at the time they are happening and enable them to respond to customers with highly relevant and contextualised responses.

One of the most powerful examples of this is responding to customers at risk of attrition — a moment of truth identified in our recent survey of CX decision makers as among the top benefits of a customer listening and engagement system. CX leaders want to be able to act on signals of attrition in real time and rescue defecting customers, generating true business value, rather than just reporting on it after the fact.

Decisioning and Engagement

This is the final component of customer listening and engagement and this is where the “rubber hits the road” and where customers really see the difference from organisations that run a fully functional customer listening and engagement system. This is where an organisation translates all those signals, the 360-degree customer view and the real-time analysis into next best actions — the actions the data tells us are the next best steps for a customer, in the context of all their interactions and their journey with the brand up till this point.

The biggest problem with traditional voice of customer systems in the past is that they focused on data gathering and were too disconnected from systems of engagement — so listening did not lead to enhanced customer engagement. In the customer listening and engagement system, these are intrinsically linked and work in concert, enabling brands to create experiences that are contextualised and orchestrated in direct response to the signals gathered.

Take Customer Listening and Engagement to the Next Level

For organisations looking to create differentiated experiences through customer listening and engagement, conduct an audit of your CX stack — understand what moving parts you already have in place and work on filling in the gaps in your customer listening and engagement infrastructure. Critically, focus on creating the linkages between the components and ensure they connect well and work together as a unified system — from signal gathering to data consolidation to real-time analysis to decisioning, orchestration and engagement.

Select the vendors that can provide the necessary connectivity between these layers to create a unified system with the full suite of capabilities, rather than a collection of individual tools completing individual tasks in isolation.

The tech market especially is well-known for change. While sales teams are usually well trained in the features and functions of a new technology, including their horizontal application across industries, they do require, however, more insight to the strategic priorities of business buyers at an industry level.  An effective training program empowers them with a sharp understanding of the technologies, the industry and enables them to build strong go-to-market plans and value-selling strategies that deliver lasting business growth.

Before building a training program for your sales and marketing teams, consider outlining your expectations of what you need your sales and marketing teams to do, and this will broaden your tech training session beyond just product features and benefits.

What do you need your sales team to deliver?

  • Increase revenues
  • Closing more business, faster, by linking your value proposition to the target persona’s priorities

What do you need your marketing team to deliver?

  • Improved demand generation
  • Winning go-to-market strategies
  • A better understanding of customers and personas and use of data to gain a competitive edge

That’s a tall order for these teams, made especially challenging when the economy isn’t participating, and some companies are leaner in response.

Build a Sales Enablement Approach That Teaches Your Teams to Fish

Ultimately, your goals are to provide your team with key industry knowledge, specific to country dynamics and covering both customer markets and the IT industry, as well as a consulting-based framework which will enable you to create meaningful value propositions.

When IDC designs our successful sales enablement programs for our clients, we work from a robust framework that can also be applied across global markets.

  • Market education for sales – Include a mix that makes the content engaging, like tutorials, case studies, virtual presentations and mastery classes.
  • Technology, persona & industry specific enablement assets – Offer as much information you can about your solution and the market. Include industry tutorials, persona buyer enablement, an industry playbook and industry brief and quick reference guide.
  • Interactive selling tools and ABM support – Offer digital, interactive selling tools that your teams can use to prove the value of your solution. IDC offers tools like a Business Value Assessment and End-use maturity or readiness assessment that leverage our data and create a trusted transaction because they prove the value of your solution to your buyer.
  • Sales Effectiveness – clearly identify competitive positioning and offer key messaging advice.

Download: Recession-proof Sales Enablement Strategy. IDC’s Sales Enablement Solutions and Capabilities

Training Content That Builds Empowered Teams

The most enabled teams have a deep understanding of their product, the industry and equally important, their customers. They know all of the personas they need to create connections with, including their pain points and desired business outcomes. Fully enabled teams also know how to empathize with customers, so they can build a narrative around their strategic priorities and break these down into use cases. Finally, closers are effective because they have the right tools to carry them through ROI conversations and validation. They can confidently map your solution to their customer’s business priorities and KPIs, and they can do this with validated data.

Consider the following content framework to achieve this:

  1. Industry insight and knowledge – specific industry insights aligned to country dynamics, if necessary, as well as case studies, trends and industry drivers of change.
  2. Strategic priorities – allow your teams to research their customers through publicly available information and identify the people and decision making they are required to do, the nature and scale of operations, how they are performing, the risks and threats they are exposed and the transformation they need, the challenges and opportunities and finally, strategy and tactics for success.
  3. Hands-on learning – provide an opportunity for your training participants to put their learning and research to use by way of a sample case study, leveraging their new industry insights and understanding of strategic priorities.
  4. Learning journey – ensure that you set clear and actionable outcomes from each session and set a plan that maps how and when you will continue to engage with your teams by re-communicating the insights and action.

If you have any questions when you’re building, or updating your sales enablement tools and training, we are here to help. Contact us or learn more about IDC’s Sales Enablement practice and how it can help you build an empowered sales team.  

A robust competitive strategy should reveal how your core markets are behaving, how your products need differentiating based on the competitive landscape and finally, what is driving customer demand.

For a well-rounded template, we created this new workbook you can download. It’s designed to be a tool that is a blueprint for exceling in your market: Building a competitive strategy workbook.

The complimentary workbook takes you through the questions you need to answer in three key areas:

  • Market opportunity
  • Competitors and Share
  • Customer Dynamics

How do you answer the key questions to help you build a solid competitive strategy? What research and data can you leverage to give you the deepest insights into your buyers and markets that will enable you to take those next steps (be it either in product differentiation or new adjacencies) with confidence?

The Technology Landscape

Your competitors are equally affected by the elements of change on the technology landscape: the economy, changing social norms changing, government policies, consumer pessimism.  Utilize the research available to gain an understanding of what is occurring. In late 2022, we published this blog post that dove into what we have called “the winds of change”. Read Navigating Through the Storms of Disruption, for guidance on near-term and mid-term planning.

Predictions are a vital resource for technology vendors. Not only should you gauge these predictions for your own business, but use them when mapping out the market opportunity in a competitive strategy exercise. For example, one IDC prediction states that by 2025, with 40% or more of IT spending as a service, use of short duration capex cutting tactics will be constrained, instead requiring lasting operational expenditure resets of 10% to 30% in software and resources. Alongside this prediction and statement on budget implications, IDC also recommended tactical actions for 2023 and permanent actions for 2024 and beyond.

Download: Market Sizing Guide

In another article Macroeconomic Challenges for SMBs and How They Are Responding, you’ll find insight into which elements, from a long list of macroeconomic troubles, SMBs are responding to. If you are an SMB trying to understand your market and the competitive forces, you’ll find the insights from a recent study that looked at how these macroeconomic concerns vary by region, as well as how supply chain disruptions are complicating projects.

The latest research studies are a good temperature check and give you an understanding of what your competitors are dealing with as well. To dig deeper, however, will require customized research. If you lack the analytics then you can leverage the strength of IT research firms who specialize in your market. The breadth and depth of data is there and so is the expertise to be able to interpret it and develop reliable inferences and plans.

Download: IDC’s Custom Analytics Capabilities Book

What is Impacting Customers?

It’s critical to have a deep understanding of what is driving customer demand. IDC uses several tools to understand today’s tech buyer and consumer.

  1. Wallet: details the technology spending of over 60,000 of the world’s largest technology buyers, enabling more targeted sales and marketing campaigns
  • Consumer Pulse: surveys consumers in seven countries about their current and near-term attitudes toward the eight segments, with particular attention paid to the concept of brand trust.
  • Consumer Market Model: leverages the framework to create five-year forecasts of consumer internet penetration, online activities, eCommerce, and other services spending across 51 countries.
  • Future Consumer Agenda: seeks to provide a futurist’s view of significant trends and technology shifts across the consumer spectrum.
  • Customized Analytics: customized research that marries existing research with primary studies. It gives you tailored data to understand what the market trends are driving the purchase decisions for your specific solution, who the buyers are in the organizations you’re targeting and the purchase drivers of those buyers.

The most successful competitive strategies combine existing research frameworks with customized insights to, once again, help you understand what’s happening for your business, specifically.

The right market intelligence mix can help you overcome product and market complexities, more accurately anticipate and outpace competitive forces by providing current market data and intelligence that feeds into your strategic planning. If you have any questions when you’re building, or updating your competitive strategy, we are here to help. Contact us today, or learn more about IDC’s Custom Analytics practice and how it can help you.